As a former financial adviser, this is a subject that is near and dear to my heart. I have both personal and professional experience in dealing with the financial consequences of divorce. Starting life over after a divorce is always difficult! There are so many things that need to be worked out. There is the time it takes to heal emotionally. You probably need to find a new place to live. You likely need to furnish your new residence. Then there is the issue of starting over financially…rebuilding savings and retirement assets. Rather than you and your partner working on paying the day to day bills together and planning for a sound financial future, your’re now on your own!
It used to be that men bore most of the financial responsibility of a divorce. Today, that has changed and many women are now in the situation of assuming financial responsibility for joint liabilities and maybe even spousal support after a divorce. The older we get the more difficult this can be. Our remaining working years become limited and there may not be enough time to fully recover financially.
All of this combined can make you appear to be a poor risk or unattractive to a potential mate. Most singles are looking for a mate that is financially secure. They don’t want someone that appears to be financially irresponsible or financially immature. They don’t want (or need) to feel the obligation to help pay off someone else’s liabilities. You should be prepared to discuss your financial situation openly and honestly early on in a potential relationships. How did you get in the situation you are in? What are your plans to dig out from under your financial obligations? It may require years of personal and financial sacrifice to get out from under your financial burden. This could be a deal breaker for many potential mates.
One key is to not dig a deeper hole by spending more money than you make in an attempt to make yourself feel better. Make major purchases such as vehicles only when absolutely necessary. Consider buying used vehicles instead of new and if possible pay cash so you’re not incurring any more debt. You may need to change your lifestyle while you’re digging out of debt. Consider living in a smaller home or apartment to save money. Consider eating out less, buying household necessities only when they are on sale, and even getting a second job to earn extra income to pay off bills more quickly.
Borrowing or withdrawing money from a retirement plan may provide short term relief to your situation but will come with a heavy cost. In addition to potential taxes and penalties, you have to consider the impact of lost earning potential. What is the actual cost of replacing or rebuilding your retirement account? Check with your tax advisor and financial advisor to learn what options might be best for you.
Getting a divorce may be an okay solution for some of your relationship issues, but it does have unintended and unexpected consequences. Make sure you think through as many of the consequences as possible.
Next week we’ll talk about some of the issues faced by widows.
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About the author.
Rick Soetebier is an Author, Blogger, Speaker and Dating Coach. He has been a student of self and relationship improvement for more than 30 years. He is an astute observer of people and relationship issues. Over time and through a relationship and marriage that ended after 25 years, Rick started to develop some of the fundamental principles that are found in his book, Dating Backward: A practical guide to dating and finding your soul mate. You can benefit from his observations, education, research and personal experience by letting him help you make better relationship decisions. Date consciously and settle for nothing less than extraordinary in your next relationship.